Water Bill

[Xeno]

Yes indeed, I pumped every spare cent into paying off that loan. Watching the principal start to fall, then accelerate downwards was bliss.

[Xeno]

That would only just cover my medication expenses and allow me a daily cup of coffee.

[corruption]

[trader_4]

If Clare lived in the US, he'd be a Democrat. Isn't that enough of an explanation?

[Ralph Mowery]

In simple terms. The company you work for lets you start up a retirement savings. They will often match what you put in , or a percentage of it up to 3 to 5 % of your pay. Depending on the company you may have several choices of where that money is sent. Such as mutual funds, or a money market . A few companies made you put that money in their stock. A very bad idea for some companies.

YOu can not take that money out before you reach 59 1/2 years old without some very heavy tax on that money. There are some exceptions.

Usually after you retire you convert it directly to an IRA.

[invalid unparseable]

I see you are in Oz. Our 401k savings can be held without taxing interest. You cannot take it out without penalty until you are 70+ and then withdrawals are taxed as income. We also have retirement cd's with same rules. There is a required minimum withdrawal each year of about 4+%.

Pension burdens were killing some companies here. GM would have gone bankrupt if not for government bail out. Pension burdens are also bankrupting governments here like Detroit were the car industry left leaving behind a bunch of retired government employees.

[invalid unparseable]

My mistake was not selling more of the company stock in the plan and putting into mutuals. Company split up and I got stock in 3 companies total less than original. Fortunately less than 10% of the plan.

A family member has all his 401k in company stock and while it is a good company it has had big problems.

[Ralph Mowery]

Frank, the age to withdraw without penalty is 59 1/2 if you are talking about the US 401k.

I started taking mine out at age 65 and there is no penalty.

It may be that you are thinking about the hit on social security.

[trader_4]

It's only a ten percent early withdrawal tax penalty, if that's what you call very heavy.

[Ralph Mowery]

I was thinking of the regular income tax you will have to pay on the

401k plus the extra 10 %. That could hit you for close to 40 % which I call heavy.

[invalid unparseable]

My mistake. You do have to start withdrawing and 70 and half which I have been doing.

[trader_4]

But you have to pay the regular tax regardless of whether you take it out early or not. And you'd have to have taxable income of over $160K to wind up in the 32% bracket. If you're a couple, take out $50K, the regular tax would be minimal, maybe zero. It's only 12% up to $39K and that's taxable income, after all the deductions.

[Ralph Mowery]

Taxes and early 401(k) withdrawal penalty There also is an immediate cost to cashing out. For one, it can generate a large tax bill. Your plan administrator is typically required to automatically withhold 20% of your withdrawal and send it directly to the IRS to cover the federal income taxes you may need to pay on that withdrawal. "That means you just gave the IRS a huge chunk of the money you've been saving for years," says Hevert. "That's money you're no longer saving for retirement." In addition to federal and state income tax, investors younger than 59? who cash out may have to pay a 10% early withdrawal penalty.

[Ed Pawlowski]

If you did NOT take 401K or IRA funds out there is a penalty at age 70

1/2. The government wants to start taxing you.

I worked to 71 so did not want or need the money but had to take a minimum at 70 1/2. I've still not touched my IRA but Fidelity sends me a check every year from age 70.

Penalty is 50%.

[trader_4]

Nothing there that deviates from what I said. Withholding isn't equal to actually paying tax. Early withdrawal results in an additional ten percent tax. If that is what you call huge, then that's what it is.

[rbowman]

I'm in the same boat, but even worse I am still working. The RMD is automatic and I have money withheld from both that and the SSI payments. This state also taxes SSI income so April isn't a happy time for me.

The theory is your income will be less overall so the tax rate will be better but it doesn't always work that way.

[Ed Pawlowski]

This years should be easy for me. Last year was a PITA with my former state. In the past I usually owed them a small amount. Last year I got a huge refund. I don't know the cut-off but I got extra scrutiny since it was over 10K. Took 4 months to get, but the guy I spoke to a couple of times was truly a helpful person and gentleman.

[Rod Speed]

Makes more sense to fly and cheaper too.

Basically the same as our self managed super.

Its actually close to our self managed super with some differences.

[Ralph Mowery]

I retired at 62. Did not need the IRA money as I was ok with the SS and pension so did not take any out. Looking at it at age 65 I decided to take a small ammount of the IRA money as I may be in a lesser tax bracket than when the RMD kicked in. Next year the RMD starts and I will be making more than I was when working 8 years ago. Not sure how that will work out with the taxes. That is not counting some money I have been making with about $ 50,000 worth of stock I am playing around on my own. This year may not be too bad, but I think the next year will be because of the RMD.

Those tax laws are just too complicated for me to work to the best of my advantage. My man Trump was suppose to simplify the taxes.

Last time the government wanted to simplify taxes was the form that had about 3 lines.

How much did you make ? Send it all to the IRS We will send you back what we want ou to have.

[devnull]

Stop complaining.  You should be happy to fund the lazy useless welfarecrats.